Teriflunomide, an immunomodulatory agent with anti-inflammatory properties, inhibits dihydroorotate dehydrogenase, a mitochondrial enzyme involved in de novo pyrimidine synthesis. The exact mechanism by which Teriflunomide exerts its therapeutic effect in multiple sclerosis is unknown but may involve a reduction in the number of activated lymphocytes in CNS.
U.S. Pat. No. 5,679,709 claims Teriflunomide and its pharmaceutically acceptable salts, composition and a method of treating auto immune diseases.
U.S. Pat. No. 5,494,911 discloses the synthesis of Teriflunomide, coupling of 5-methyl isoxazole-4-carbonyl chloride with 4-(Trifluoromethyl) aniline in acetonitrile solvent to obtain Leflunomide. Subsequent ring opening reaction using a base followed by acidification results in Teriflunomide. Synthesis is shown in the Scheme-1.

This method has the disadvantages of usage of acetonitrile in the coupling which involves the necessity to isolate the Leflunomide.
PCT publication WO2015/029063 claims the process for preparation of Teriflunomide by reacting 5-Methyl isoxazole-4-carboxylic acid with thionyl chloride using mixed solvents and converting to Leflunomide in-situ by reacting with 4-(Trifluoromethyl) aniline, reacting Leflunomide with a base followed by acidification. Synthesis is depicted in the scheme-2.

PCT Publication WO 2001/60363 mentions about the usage of biphasic medium for the synthesis of Leflunomide. However, the usage of organic solvent especially toluene leads to the isolation issue due to the phase separation problem. Usage of Dimethyl acetamide is undesirable and improved processes which avoid its use are required.
Presently known methods have several disadvantages, including:                (i) Usage of mixed solvents (involving a solvent with higher boiling point) in the preparation of acid chloride. Distillation of the solvent may lead to loss of the product as the boiling point of acid chloride is very close to the boiling point of DMF. In other words, this operation is highly dependent on the vacuum/temperature applied for the removal.        (ii) Laborious work up procedure for the isolation of Leflunomide.        (iii) Purification involves a solvent with higher boiling point which is not desirable.        (iv) Overall yield is often low (˜50%).        
Reported procedures involving Leflunomide as the intermediate, involve isolation of the Leflunomide as a solid in one or the other way. The isolation involves concentration of the volatile solvents in presence of base leading to the formation of impurities (DE 634286).
Accordingly, there is a need for safe, simple and efficient method for producing Teriflunomide, that not only avoid isolation steps, but also affords product of required quality and without undesired impurity. It is therefore, needed to develop a process which not only overcomes the disadvantages of prior art but also is economical, operationally simple and industrially applicable.
The present invention provides an improved method for production of Teriflunomide by eliminating the steps of isolation of Leflunomide intermediate. In other words, the process of the present invention involves telescoping from 5-methylisoxazole-4-carbonyl chloride to the crude Teriflunomide of Formula-I.